Roku's (ROKU) latest cost-cutting measures should attract additional investors to the streaming-device maker's stock, CNBC's Jim Cramer said Wednesday.
Investors had been "reluctant to buy Roku because they were losing money hand over first, and they didn't make the same so-called pivot" toward profitability as other technology firms, Cramer said on "Squawk on the Street."
But, in a securities filing Wednesday, Roku said it was laying off about 10% of its workforce, consolidating office space and removing some existing content from its own streaming service. The company said it will book restructuring and impairment charges related to these moves. The majority of those charges will occur in its ongoing fiscal third quarter.
Shares of Roku surged more than 7% on Wednesday, to over $90 each. While the stock has more than doubled so far in 2023, it remains well below its all-time highs of nearly $480 per share, which was reached in July 2021 amid the Covid pandemic.
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Prior to Wednesday's announcement, Cramer said Wall Street analysts expected Roku to begin reporting positive adjusted earnings per share in full-year 2026. That profit outlook is likely to change meaningfully, he suggested. "Roku joins the ranks of companies that have said, 'We are going to pivot," he said, suggesting that positive EPS could be reported as soon as 2024. "They are not going to lose anything, is my prediction," he said.
The CNBC Investing Club does not own shares of Roku, but the company's devices and streaming services compete against the likes of Club-owned stocks Amazon (Fire TV), Apple (Apple TV) and Alphabet (Google Chromecast).
Here's a full list of the stocks in Jim's Charitable Trust, the portfolio used by the CNBC Investing Club.